Category Archives: Privacy & Security

When Cisco’s CEO, John Chambers, took the stage at CES in Vegas this year and announced that there was a difference between The Internet of Things (IOT) and the Internet of Everything (IOE), many cried “semantics”. But there is a difference and one that ripped across the US to the National Retailer Federation (NRF) Big Show at the Javits Centre in New York.

IOT, according to Chambers, is made up of billions of connected objects; however, IOE are the smart networks that are required to support all the data these objects generate and transmit. What will help move the IOT into the IOE and drive what Chambers predicts to be a $19 trillion in new revenue by 2020?

IOE requires a universal solution to tie the billions of sensor data into an intelligent device and system agnostic solution.

To our detriment, we are so focused on the idea of a hardware (IOT) solving all our problems that we neglected that simple insight that all these hardware solutions require a method of managing the people and service behind them.

The industry needs a wireless domain (DNS) naming solution that can provide profile, tools and privacy controls to enterprise and the consumer.

When I was invited to sit on a panel at the launch of the new wireless registry (www.wirelessregistry.com) at the NRF show and I realized that this registry could be the silver-bullet platform.

50 Billion Things

When Cisco, Qualcomm, IBM and other set up shop at NRF to talk retail, the IOT verse IOE discussion continued. Brand agencies such as Ogilvy were pitching a solution using Qualcomm’s wireless Gimbel platform to solve retail engagement in the store. Qualcomm’s Gimbel platform is essentially an IOE riding on Apple’s IOT’s iBeacons? Mobile Location Analytics (MLAs) companies that collect consumer behavioural analytics, are a big data IOE play riding on the IOT emitting from the phone and anchored to its MAC address

There are a proliferation of IOE solutions using different technology that require different CAPEX and resources.

Presently there are an estimated 10 billion sensors globally. This is predicted to grow to 50 billion sensors by 2020. Imagine the wireless noise we can anticipate as we move from city to city, street to street, aisle to aisle.

There are barriers everywhere:

On the consumer side we have option paralysis but more importantly simple human inertia.

On the retailer and brand side we have incumbent investments and IT budgets to navigate.

On top of all this stasis we have the DC beltway privacy folk crying “do-not-track”.

How will the consumer navigate this noise? How will the retailer, brand, entertainment provider select from the exploding list of vendors selling various solutions using LTE identification, WiFi MAC identification, Bluetooth MAC, IMEI, etc.

My Wireless Name

The phone in 2014 is becoming less of a Cracker Jack container that acts as a repository of millions of sundry apps, and more of an intelligent device that performs as a server that can manage our world through smart profiling and APIs.

Think about it. We have been hoodwinked by the OEMs to believe that an application store tethered to a phone can deliver any service, entertainment, widget. The app store was a marketplace to the world: clocks, measuring tapes, cash registers, coupon dispensers, shopping lists, ad infinitum.

Google’s acquisition of Nest is good example of the changing landscape where the app will live in the IOT and the device will simply be the profile and the auto-controller. The 94Fifty smart basketball, the Sensible Baby smart sensor monitor, the remote Vibeasy vibrator: all use the phone as the remote control manager.

A service such as The Wireless Registry can offer a naming protocol that can work agnostically with all the in-market sensor solutions and offer a central repository for a retailer, brand, and entertainment provider’s identity. Any existing wireless signal (SSID) that a coffee shop or a big-box retail transmits can now have a name (Starbucks, GAP, Walmart) with an accompanying sophisticated profile. A consumer that has a phone, tablet and PC can now attach a personal name and wireless profile to their MAC addresses.

When the retail and consumer wireless signals bump in the proximal world, the consumer profile can do a simple look up can see what offers, services, commerce is available to them based on their specific identity. The consumer can also block unwanted solicitation answering Jules Polonetsky and the Privacy Commission’s concerns around “do-not-track”.

Now the consumer is in full control of their identity and the phone becomes an intelligent server interacting with the world of wireless signals based on that consumer preferences.

While this solution can interface with existing apps on the phone, ultimately the profile and preferences can be baked into the OS as part of the devices DNA.

To sum up Mobile World Congress 2013, I will borrow from Peter Marx, head of business development at Qualcomm Labs. Peter talks about a tendency for PTA or (for those in the know) Premature Technology Arousal in the mobile industry.

Much of the MWC 2013 floor area at the new Fira Gran Via venue exhibited PTA or Premature Technology Arousal. Solutions that are excited about being solutions. Solutions that are too early. Solutions that are missing reach and frequency. Things that are just not simple enough to drive adoption.

Even before 70 thousand executives hit the show floor, there were signs of “PTA”. From the Near Field Communications (NFC) show name tags that tried to emulated plastic (but that few used because you still needed to show the plastic) to tapping on Coke dispensers with cloud-base wallets that are many quarters away for mainstream adoption.

Booth after booth in this 1.01 million square feet techno-playground displayed incredible solutions and screens. But the real story to follow was how each solution quietly added value to a given business ecosystem. There was an invisible hand playing connect the dots. Here are a few examples:

The Invisible Google Hand

Google was almost absent – unlike the MWC of 2011 and 2012 where Google groupies ran from partner booth to partner booth in search of cute Android pins. But Google was most definitely on the floor. This year the company is wisely playing “powered by Google”. They are the dark silent type. Turn left or right in every hall, Android is the fuel this industry is consuming.

The same holds for Qualcomm. They are the chip manufacture that is quietly taking the lion’s share of the revenue on each global handset. (Intel just cannot seem to create a competitive landscape.) Qualcomm Labs is building in consumer identity and credentials onto its “platform” hoping to not only power the connected device but also own the big data behind the user. When Qualcomm demos a vision of a home of the near future, they power many of the moving pieces.

The Samsung Show

While Qualcomm’s chip and Google’s OS were the main stories in Barcelona, another key and not so silent player is Samsung. (So much so that my hotel concierge asked me if I was attending that “Samsung” show that was in town.) The word that floated above the white new-age Samsung booth was “innovation” but the innovation is not just the 3D camera or the ubiquity of the new S-Pen. The innovation was in their business model connecting their screen across the consumer journey. The 3D camera sells their tablet and television. The S-Pen and its SDK allows for ergonomic continuity across their new tablets and fablets.

Mozilla is other important story in Barcelona. Using the Firefox browser on lower-end ZTE devices to run the camera, map and . . . oh ya the browser was a definite tech-turn on. Moving the developer and more importantly the consumer out of the (Apple-invented and dominated) app store into the real world super-app is an inevitable step and fundamental to our mobile evolution. The quicker the industry can move away for relying exclusively on industrial design and the app storefront as the sales tool, the faster we will grow.

2014 Screen Wars

The most important leitmotif was the screen. Not only the proliferation of devices with new form factor and appliance, but the realization that it is in the connecting of these screen that the we can accelerate business models. Samsung, ZTE, Motorola, Nokia all address the consumer journey across all screens and throughout their day. Nearly all marketing VPs had spent their last few months and budget trying to tell this consumer story.

Again while many products had indecent “PTA”, the most important insight was not what was happening on the screen but what companies were doing to connect them seamlessly. The new battle ground this year moving into MWC 2014 will be centered around who can best manage big data, wallet credentials and identity between the screens.

As VISA launches the digital wallet V.me, a “digital wallet” in a bid to be relevant in the proliferation of cloud payment credentials, VISA and other incumbent payment providers should be concerned that in a cloud-based economy, it may lose its position in the market.

Up-starts such as Square and digital innovators such as Paypal are trying to challenge the status quo and change the way people pay with plastic. Google and Apple continue to disintermediate the card vendors by aggregating large volumes of transactions and pass them back to the banks as “prepaid” with low interchange fees. All in all, new payment players are looking at the old business hegemony of VISA and MasterCard and going OTT (over-the-top).

It is not about eliminating plastic. And it is not really an issue of whether these plastic holders are going the way of vinyl; but more importantly an issue of the business model behind these card and card credentials. Roles are being commoditized.

Cards are simply a way to store and relay banking credentials to the POS in the store and the POS in the cloud. In the US this is no more than a number that is stored on a magnetic swipe and embossed in the plastic. In the rest of the world this number is housed more securely in a chip. A chip that can be emulated securely in the phone chip (or SIM).

It is unlikely that the costly backend systems in the US and Europe that deal with fraud and regulatory issues will be displaced. And that the 2,400MM VISA cards and the 1,000MM MasterCard that use these systems will disappear. (*)

However, as VISA and MasterCard continue to be the trusted brands on every online and physical store they may find that their margins dipping. As banks try to revamp their mobile banking applications and ATMs to be more relevant to their peripatetic customer, fewer value added fees and services will impact their margins.

The question to ask is who owns the customers relationship because it is ultimately this relationship (the final foot) that they can monetize. The emergence of mobile and card-linked offers is making the point-of-sale systems in the cloud and eventually in the store, the new promotional depots for digital deals and coupons. So called “big data” and value added services will ultimately yield the most profit.

*(In emerging markets, where there little infrastructure, companies like M-Pesa service the unbanked via their mobile phone account. VISA has entered these emerging markets through acquisition of Fundamo and MasterCard through a partnership with Telefónica. Similar to the US, these companies are vying for the last-mile relationship.)

In the following interview I discuss with Wayne Hurlbert, the preeminent business blogger (Blog Business World), that retailers need to embrace new strategies to reconnect with their customers. We discuss:

Strategies to win back customers who have left the malls, big box, and other retail outlets for their mobile devices.

How the behavior of mobile shoppers is different from both tethered online customers and from the traditional in store consumer.

Techniques for winning back those customers, reconnecting with them, and regaining their long term loyalty.

How to embrace mobile technology as a competitive advantage for your business, and place yourself in the forefront of the mobile shopping revolution.

I was listening to David Kirkpatrick read The FaceBook Effect biking to work this working. The opening chapter is about how Oscar Morales galvanized Colombia against the FARC terrorist group. Hundreds of thousands marched globally off the drum of Oscar’s Facebook page . . .

. . and it struck me as mildly ironic that while Facebook has become synonymous with democracy (a million voices against the “powers that be”), its new Silicon Valley HQ is now at the center of an “anti-democracy” debate.

Facebook proposed this week that it will terminate its community users’ right to vote on changes to site policies. When you give a libertine community certain powers (such as the right to impact the site’s design) it speaks to the core philosophy of an organization.

When the same company says that it is “too big for democracy”, one may take this as a sign that the post-IPO corporate culture is clamping down on what made Facebook a successful social experiment.

I can understand that a corporation may find democracy inconvenient. I can understand that many in this new public company could see this user-based democracy as a slipper slope to ochlocracy.

However, it speaks to Facebook’s libertine roots. It is incredulous to use FARC as examples of The Facebook Effect and then withdraw that same crowd-sourcing element that has enabled the community to grow.

Gary Schwartz, president and CEO of Impact Mobile and chair of the North American Chapter of the Mobile Entertainment Forum, tells Street Fight that building trust should be the core of a retailer’s mobile and online strategy. “The key to engaging with the consumer in a trusted relationship in a retail environment is you don’t want to engage with people who don’t want to engage with you,” says Schwartz. “The outreach should be focused on loyalists with a retailer’s brand. It’s about your loyalists putting up their hand and saying ‘hey I want to talk to you because I love your product.’”

“You need to make a call to action on all your touch points, and say if you love my product opt in. Once you have that, you have to let them opt out at any time,” Schwartz adds. He believes the strategy can be outrageously successful: “If you’re on target, if you are talking to them and they love your product, they will stay with you. It will attract 10x over your email channel.”

Building trust requires developers and businesses to implement a strategy that give consumers a better idea of what information is collected from them, and what choices they have to control it. Regulators have encouraged developers and businesses to engage in “privacy by design,” that is, incorporate transparency and protections for consumers on their information as products are built and launched.

Regulators have become increasingly aggressive in addressing what they perceive as abuses in the use of consumer information from mobile devices. Already, Apple, Google, Microsoft, Hewlett-Packard and Research in Motion and other major application stores have agreed with the California Attorney General to require all developers to provide privacy policies with their applications, include a process to display such policies in their stores, and report developers that are not complying. The California Attorney General’s office warned it will take enforcement action if the privacy policy process is not in place within six months.

The way we define the term privacy is subjective. In the United States, we police privacy based on a very broad definition under Section 5 of the Federal Trade Commission Act that prohibits “unfair or deceptive acts or practices in or affecting commerce.” The devil is in the policy details.

If the news headlines over the past few months are any indication, we are mighty confused with what to call private and what to call public, what to sanction and what not to sanction. How can we start to solve small-screen privacy when we have not solved our digital angst on the desktop?

Jules Polonetsky, director of the Future of Privacy Forum, says that when the browser invariably crashes it pops up a commiserating dialogue box asking you permission to send the diagnostic report to the browser company anonymously to help them fix bugs and build a better browser.

Faced with this privacy brief, only 3 percent of users click “Yes.”

Digital natives

Is it because we are digital immigrates? Our children happily offer data everyday about personal activity without hesitation.

Is the challenge simplifying the legal narrative to allow consumers to make an informed decision without interrupting their next click on the small screen? It seems an improbable feat.

The FTC, which is taking a proactive lead on privacy in the beltway, seems cognizant that it needs to create a flexible framework to best interpret what is unfair or deceptive in Section 5 of the Federal Trade Commission Act.

The Impulse Economy

We live in a world where our mobile devices have become extensions of ourselves. We depend on them for instant connections to entertainment, social media, news, and deals. The phone has become our ticket, loyalty card, and catchall wallet. Networks are faster, phones are smarter, and the mobile shopper is ready to spend money now. What can a business do to maximize the mobile buying power of the new impulse consumer?